Saturday, December 29, 2012

There is something about a captive audience. They have limited choice. Where they are is what they experience. Take for example, travel. During that last few months, I have taken several flights and stayed in several hotels. Although many airlines and hotel chains publish CSR Reports, I have rarely found one in the pocket of an airline seat or on the table in my hotel room. And yet, what better a place to put a CSR Report? I almost never take a flight without skimming through the airline booklet in the seat pocket. I almost never stay in a hotel without taking a look at the magazines they leave on the table or desk in the room.

It is not necessary to print a full report. Often, there is room to add a short reference to your sustainability approach and link to your report on or in materials which are already printed, or where there is empty space (the inside cover of your Hotel Services booklet, for example). Alternatively, a postcard or small flyer highlighting some sustainability achievements and a link to the report could be enough to catch the attention of some of the captive audiences that are just sitting ducks, ready to absorb your sustainability message. This is about taking your report to where your stakeholders are and not expecting them to come and seek it out.

Therefore, for the benefit of all those companies that could enjoy millions of additional stakeholder touchpoint opportunities every day and new outreach possibilities to engage stakeholders to advance awareness of their sustainability approach, and improve their reputation, here are 75 places to strategically place a CSR Report and get it noticed:

In the local hair salon (hair products manufacturers)
In the doctor's waiting room (pharma and healthcare companies)
In the dentist's waiting room (pharma and healthcare companies)
On the passenger seat of newly purchased cars
In the box that encases your new laptop

In your new game of Scrabble (toy manufacturers)
Inside the box of the new watch you just bought
On the inside cover of all printed books (publishers)
Inside each wagon on the train
In every box of chocolates

Inside new picture frames (instead of that stock smiling woman photo)
Inside every box of home-assembly furniture from home furnishing retailers
Inside every boot from outdoor sports companies
Printed on the outer packaging of a six-pack of beer
At the ticket office of a football stadium

On your website (you'd be surprised)
In the Board Room (you'd be even more surprised)
As the default alignment printing page for all new printers
On cinema seats
In different parts of university campuses

In airport restrooms
On the tables in cafes and restaurants
On company dining room napkins
On the back seats of taxis
On plasmas in furniture showrooms

On the inside of cereal boxes
Inside new computer travel bags
On the seats at the opera
On the inside of wrappers of chocolate bars and snacks
On the underside of yogurt tops

On the back of company envelopes
On the back of printed payslips
On the packaging of 25kg dog food bags
As a newspaper insert
As a standard email signature for all employees

On the inside of doors of public toilets
On the labels of garments
On the saddles of horses
In the spa reading room
On the reading tables at the local library

In the students careers room on campus
On the back of a CD-rom or music disc
In swimming pool changing rooms
In hotel restrooms
At any visitors' center

At the unemployment office
On the notice-board at local community centers
On the back of bus, train and flight tickets
On pews at the local church or seats at the synagogue
On the tops of cans of soup or other preserves

On the back of bank statements
On the back of healthcare prescriptions
On the back of printed supermarket checkout bills
In mobile phone service centers
On the packaging of automotive components

On tables at the local barn dance
On bottles or cartons of milk
Preloaded onto every portable flash drive or disc-on-key
On every Duty Free buy-four-get-one-free printed flyer
In electronic appliances' printed user guides

On the carousel at the local fairground
In the ski-lift cable car
On the underside of surfboards
Printed on re-usable shopping bags
On the back of museum entry tickets

On the inside of T-Shirts
On toilet paper and napkins
On the inside lids of cosmetic creams
On the walls of prison cells
On the inside of energy bar wrappers

On the back of conference name tags
On the inside doors of personal lockers at sports centers
Inside safety-deposit boxes
Inside new suitcases or briefcases
On the back of lottery tickets

Some of this might sound a little far-fetched... and some of my suggestions are of course a little tongue-in-cheek .. but most of them are actually places or locations which are dead space and where a small reference to a CSR or Sustainability Report could easily be printed and may catch attention. Just think, if every time you bought a new electronic appliance, the packaging and user manual included a few highlights from your Sustainability Report and a link to the online report or download. Maybe a few of you might take the trouble to have a look at your next session on the computer or tablet? More importantly, when you are sitting for minutes or hours in a doctor's, dentist's or hospital waiting room somewhere, instead of picking up the latest copy of Vogue or today's newspaper, you might just be drawn to read about a pharma or healthcare company's impacts on society. When you are on a plane, train or a long bus ride, might you not pick up a small booklet describing the transport provider's CSR efforts?

Publishing your Sustainability Report is not enough. Getting it to your stakeholders, wherever they are, is the key. Even then, they may choose not to take an interest. But at least that's a choice. If they don't know, they can't choose.

Here's to a Happy 2013 - the Year of the Ubiquitous Sustainability Report!

Recently, I took the opportunity to chat with Carolyn Panzer, Director of Corporate Social Responsibility for Diageo plc. Carolyn is responsible developing and overseeing the strategy for community investment, external reporting, and alcohol in society - including, responsible drinking initiatives, responsible marketing and innovation, and alcohol policy. Carolyn is also the Chairperson of the Distilled Spirits Council's Code Review Board and has nearly 30 years of experience in the beverage alcohol industry, working across industry sectors in both the US and UK.

Carolyn will be talking about: "Participating in indices and rankings - how does this contribute to reporting best practice?"
at the February conference.

"The reporting process helps me enormously. It makes us think about our data more and understand our impacts. Smarter Reporting for me is embedding the reporting process in the business - making everybody accountable. Actually, our people really appreciate hearing our story and participating."

"For me, one of the most challenging things about my role is that Diageo is a big company and keeping on top of everything that is going on in the business, keeping up-to-date with internal and external developments and having the headspace to keep on track, is a major exercise in time-management. This can occasionally make me feel vulnerable, I feel I should know everything about everything, but obviously that's not possible. My secret for keeping on top is to encourage others to know more detail. Not only does this help me, it empowers the organization to own sustainability. I don't make it easy for the business. I help them take accountability and own their role in advancing our sustainability and responsible drinking programs. This is now paying huge dividends."

Diageo is the world's leading premium drinks business with beverage alcohol brands across spirits, beer and wine including Johnnie Walker and Bushmills whiskies, Smirnoff Vodka, Baileys, Captain Morgan, Guinness and more. Headquartered in the UK, Diageo trades in 180 countries and employs around 24,000 people with net sales of almost GBP10 billion. Diageo manufactures and supplies its brands its brands in 43 distilleries, 16 breweries, 13 wineries, 19 packaging and blending operations, 9 warehouses and 8 other sites.

"This year's report has a lot more engagement - we pushed people to align more closely with GRI indicators. We also we did better on the materiality piece. We conducted a market pilot study and now we plan to take that forward and expand it. We ran three workshops on materiality. Also, we tried to use more everyday language and less "corporate-speak", and, in the presentation of the report, we tried to make it layered. We recognize that not one size fits all and that different stakeholders look for different things, so we opted for a five-minute-read approach as a short summary option for people who don't want to get into all the details. You can you go in and read different sections at a general level or dig deeper for more detail."

The Diageo report this year demonstrated good performance achievements against a range of key metrics against several multi-year quantitative targets within the context of a well-laid out strategy. For example, water efficiency improved by 7.2% in 2012, on track to meet a 30% objective by 2015 against a 2007 baseline. Average packaging weight has reduced by 1.6%, on track to meet a 10% target over the same period, bringing the cumulative total to 4.8% reduction. Lost-time accident frequency rate reduced by 43% in 2012, overachieving a 40% target for 2010-2012 by 17%, showing good progress in embedding a safe working culture. However, by far the most material issue for Diageo relates to the role of alcohol in society and Diageo's responsibilities to address alcohol misuse. Diageo's report states: "In all [stakeholder] workshops, addressing alcohol abuse and promoting responsible drinking was consistently the most important issue for stakeholders as well to us as a company."

I asked Carolyn Panzer about how Diageo assesses the impact of its multiple activities in this area:

"Alcohol problems are not new and there have been many initiatives to address these. You can count thousands of initiatives by the alcohol industry, but the real question is what is effective? Where do you focus your resources to achieve the biggest impact? We want to tackle the issue of problem drinkers. Raising taxes on alcohol, for example, is not necessarily effective for problem users as there will always be a way around this."

A case in point is the situation in Keyna where it was estimated that about 50% of alcohol consumed was in the illicit sector. This was problematic, as such products were often made with harmful ingredients which caused illness or even death. Diageo redesigned its entire supply chain to create a new product made from locally sourced ingredients using innovative technology representing a first in the industry and significantly reducing costs for local supply of a safe, quality beer beverage called Senator Keg, costing one fifth the price of Diageo's mainstream beer. Since its launch, the brand has gained 40% of the Kenyan beer market. It's well worth reading this case study in Business Today about the Senator Keg story. This is a fabulous example of how Diageo can support changes in consumer behavior around alcohol. This is the true value of how an alcohol company can work with consumers and local organizations to understand specific issues and behavior patterns and help create breakthrough change which adds value to society and, of course, to the business.
In the area of problem drinking, Carolyn continues: "There are some things that we know work. First, screening and brief intervention demonstrates proven efficacy with problem drinkers. Screening individuals through a set of ten questions and engaging them in a conversation about risks helps people reduce problem drinking. We have provided grants to support this kind of activity. Second, high visibility enforcement of the law on drink-driving is effective. Not every country, for example, has a maximum drink-driving limit. We work to support introduction of legislation in this area in countries where this is not present. However, even where there is a legal limit, highly visible enforcement is key. For example, in Mexico City, we ran a campaign in support of the local law enforcement authorities, in which we contributed 50,000 breathalyzer kits. Drink-driving reduced by 30%. There is an important continuum that you need to follow to achieve change. We need to ensure the right regulations as well as build general awareness. In the U.S., we spend 20% of our broadcasting spending on responsible drinking messages. We always try to work in partnership with other organizations and groups to ensure we have the best understanding of the issues and the best expertise on board to move forward."

Finally, all Diageo employees have a role to play in advancing responsible drinking behavior. Carolyn says: "We are always trying to connect our people with our CSR story, and we ensure they are involved and informed of our initiatives in this area. For example, over the Holiday Season, we campaign our employees with the need for extra vigilance and their role as responsible drinking ambassadors."

As it is still the Holiday Season, this is great advice for all the CSR Reporting Blog Readers. I am not much of a drinker myself, actually. Personally, I am more concerned with ice-cream rather than alcohol. If ever there are laws which limit ice-cream consumption prior to driving, I may have a bit of a problem.

Monday, December 24, 2012

Santa's done it again. At the cutting-edge of knowledge, global advancement, pioneering communications and sustainability commitment, Santa has published an Integrated Report, in the spirit of the 2012 zeitgeist and general reporting hype. This Annual Integrated Report describes Santa Claus Inc. (SCI)'s financial and sustainability performance for the first time ever in one report, demonstrating integrated thinking, integrated actions and integrated communications. In fact, the only thing that is not integrated is Santa's stakeholders, all of whom want different things at different times via different channels. However, this is no more than a minor distraction for Santa, who, as you will recall, is an incredible woman.

This year, Santa has attempted to integrate the new G4 Exposure Draft Guidelines into the development of this report, which caused the General Elves and Pixies Trades Union to demand serious overtime payments, as the report ended up being 4,323 pages long. Santa declined their requests on the grounds that the elves and pixies should consider working on G4 as a valuable learning opportunity, which could turn them into reporting celebs after the May launch of the guidelines, because very few other companies will be able to adopt this new reporting framework without hiring G4 experts. In lieu of overtime payment, Santa agreed to provide each of the elves and pixies with a Santa Academy Certificate stating that they are G4 competent. This, fortunately, averted a general strike, which would have had to be reported in the Integrated Report, adding another three pages.

Additionally, the 2012 report was written in accordance with the recently published IIRC Integrated Reporting Framework Prototype. Actually, Santa didn't really understand quite what this meant for SCI's operating practices, but she felt that it was the right thing to do, given that the financial services community is supporting this, even if nobody really knows what it means. As Santa would like to expand SCI operations to new geographies in 2013 (Mars, Venus, Jupiter), requiring significant additional funding, Santa decided to demonstrate responsiveness to stakeholder views in a balanced, complete, linked, connected and material way.

As I usually do, with permission, I will share with you the Santa Claus Annual Integrated Report 2012 CEO Statement:

Dear Stakeholders (especially all of you with money to invest),

Ho! Ho! Ho! It is time for me to wish all of you a wonderful holiday season filled with bright lights, good food, and iPhone5's. As usual, at this time of year, we reflect on the past twelve months and what kind of a footprint we have left. I am pleased to report that my footprint has significantly reduced this year, as, after going on a strict diet, my feet got much thinner and I went down by two shoe sizes.

As far as Santa Claus Inc. is concerned, we had a very challenging but positive year, in which we increased our revenues by 70%, mainly deriving from royalties for use of my name and photo, hiring of red Santa suits, the explosion of Santa Apps and a range of new services and products which generate Shared Value (see below). We distributed more toys than ever during the last festive season, and did so with high energy efficiency and reduced carbon emissions by 0.3% per kg of toys. Our toy-recycling program worked well and we are now considering a Recycle your Recycled Toys campaign for 2013, and we might even extend this to a Recycle Someone Else's Toys Facebook Campaign for maximum impact. Our workforce was stable in 2012, and we maintained a positive safety record (with the exception of two pixie fatalities, who were outsourced to the Samsung plant in South Korea, which has now been confirmed as a death-trap). Finally, we tightened up our corporate governance by putting a lock on the Boardroom door so that Directors cannot escape when it's time to discuss the Annual CSR Report.

Shared Value through new Santa Services

In 2012, we significantly broadened our offering to create shared economic and social value through a range of new products and services. We felt it was time for Santa to take advantage of current technology and ensure accessibility to disadvantaged populations around the world, which, incidentally, is very profitable. We love Shared Value, as long as we get the Bigger Share. We love Bottom of the Pyramid, as long as Profit is at the Top. For example, in 2012, we encouraged the development of Santa Apps, and you can now find a range of innovative and creative offerings on iTunes. A popular choice is Talking Santa, which "enables you to create and share joyous 3D video animation greetings and Christmas cards that will warm the hearts of everyone on your wish-list!" There is also a Silent Santa App, in case you are fed up of listening to Talking Santa. You should also check out the free Santa Dancebooth App, in which I show off my best moves, though if you want me to dress up in a snowman or a gingerbread costume, there is a small charge. If you want me to dress up in a Bunny Girl outfit, you will have to pay considerably more. Additional Santa Apps include a Santa Jigsaw App, Santa Wallpaper App, Santa Games Apps and Santa Quiz Apps. You can create new Japanese meals with the Santa Sushi App, new Mediterranean Tastes with the Santa Hummus and Falafel App, and new desserts with the Santa Ice Cream Flavors App (recommended - ever tried reindeer-flavored ice-cream?). We also developed a few adult-only Apps such as Santa Strip Poker App, Santa's Night on the Town App and Santa Gets Naked with Prince Harry App. These Apps are strictly not available to minors, unless they lie about their age. We are in favor of responsible App-ing.

We have also launched a new range of Santa products. For example, in 2013, we will launch the first Santa fragrance, the first Santa sportswear line and the first Santa Thermal Underwear line. While I don't use much perfume, and have no time for sports, I can personally vouch for the thermal underwear. Starting in the first quarter, we will offer reindeer and sleigh hire by the day or by the hour, with optional pixies. Finally, our most ambitious project yet, in partnership with the Lapland Association for Sustainable Travel, is Santa-Eco-Vacations to Lapland. For the first time, tourists will visit our natural elf and pixie habitats, eat local organic foods and shower in cold water. We undertake to offset carbon emissions generated during your stay, provided you pay extra.

Renewable Energy

During 2012, we installed a 400 panel solar array in Santa's Village in Lapland, intended to provide our operations with 100% renewable energy. Unfortunately, as we only had 3 days of sunshine this year, we spent over eleven months in darkness, cold and relative isolation. We have now relocated our solar panels to our Holiday Home for Retired Elves in Hawaii, and reverted our Santa HQ to grid-based fossil-fuel electricity. While we have not improved our environmental impact, you cannot fault us for good intentions.

Climate Change

Given that the globe is getting warmer, were are fearful that melting of snow in Lapland will create flooding, disruption to Lapland's natural biodiversity, and represent a threat to our local ecosphere. We have therefore established the Santa Snow Preservation Fund. All donations should be made to the CSR Reporting Blog. Fast.

Disaster Relief

This year, we have witnessed several effects of climate change in the form of extensive natural disasters and Santa and her team were always ready to help out. After Hurricane Sandy, for example, we donated 43 tons of recycled toys to over 5,000 children in the affected areas. This kept the kids occupied while parents were arguing with the insurance companies about levels of compensation for their homes damaged by rains and floods. We also provided 10,000 brand new walkie-talkie units for families who could not gain access to the Internet. Using these walkie-talkies, families were able to communicate 140 character messages to a neighbor and have him tweet their current position and ask for assistance. During this period, over 42,000 walkie-talkie based tweets were tweeted. We have approached Twitter to discuss a Joint Venture called Walkie-Talkie-Tweetie, designed specifically for disaster relief and emergency communications.

Animal Welfare

For the first time ever, in 2012, we were attacked by an animal rights organization for not providing our reindeer with decent working conditions and paying them a fair wage. This was the result of our two negatively-disposed whistleblower reindeer who went public with a story about forced, unpaid overtime during the holiday season. It is true that our main holiday season in December and January does require reindeer to work additional hours, often in inclement weather, but we do have a Reindeer Relief Package which provides protective clothing, anti-stress tablets and ergonomically-designed reins. Furthermore, we do pay all overtime due to reindeer, but in the interests of the Christmas Spirit, we require them to donate it back to provide more toys for the world's children, so that we can spread more cheer and goodwill. After long negotiations, we conceded and improved terms and conditions for all reindeer. However, next season, the whistleblowers will be looking for new jobs.

Ethical Supply Chain

As you know, Santa has one of the most complex supply chains in the whole world, as we source our toys from over 14,000 toy makers and factories from every corner of the globe. This year, we developed an Ethical Supply Charter which all suppliers must agree to adhere to. This charter binds them to maintaining ethical practices, upholding human rights and using environmentally-friendly materials in the toys we source. 100% of suppliers signed the Charter, therefore we can confirm that our supply chain is 100% ethical. We decided not to do supplier audits as we have seen that every other global manufacturer which conducts supplier audits has not found this to be an effective way to prevent violations of ethical standards. Look what happened in the recent fire at the Tazreen factory in Bangladesh. One day, global manufacturers will realize that audits, training programs and prescribed checklists are not enough to transform an entire culture of low-cost, fast-paced, high-volume on-demand consumerist supply chains which perpetuate corner-cutting, safety-hazards and human rights abuses. For the time being, everyone who receives a Santa toy during this holiday season can be comforted by the knowledge that our supply chain is no less ethical that anyone else's.

A New Call-Center

In the interests of being more responsive to our stakeholders, we have established a new call-center, offshored in Cancun, to respond to the growing enquiries we receive about our services. The main problems seem to be Santa-denialists, who claim that Santa Claus does not exist. Generally, our response is to send them a plastic, head-bobbing Santa and that does the trick. Other inquiries are about toys arriving late. Generally we explain that it is not the toys which arrive late, but Christmas which arrives early. This usually keeps them satisfied. The most significant enquiry relates to our Santa Claus Executive Pay Policy and the gap between the highest level of pay in the organization and the average elf wage. As you know, there is only one Executive at SCI and that's me, the CEO. My pay is determined by the Board of Directors, which I chair. We tried to compare CEO pay levels at similar companies but, unsurprisingly, we are quite unique in our global marketplace. Therefore, I feel justified in saying that comparing my Executive Pay to the average elf wage is not material for our business, and does not reflect the complexities of a challenging, goodwill-generating, global operation from which all benefit. Look at the broader picture. If I am happy, the elves are happy.

This short introduction to the Santa Claus Inc.'s first Integrated Report does not do justice to the intensive processes we have driven to improve our sustainability this year. However, since the the Santa heritage dates back to the seventeenth century, I think our record of being a sustainable operation cannot be questioned.

Wishing you and everyone else in the world a wonderful Holiday Season and a Happy New Year!

This is a time to reflect on the joys of life and the joys of publishing Sustainability Reports. A time to be merry and indicator-driven. This is a time to eat well and edit well, engage with friends and dialogue with all stakeholders, think about what's important to you and call it material, recommit to your higher purpose and approve your reporting budget.

However, for those of you who will not be having holidays this month, in the interests of diversity and inclusion, this is also for you.

To readers travelling to an exotic climate this holiday period: Happy Getaways!
To readers who like to pick up gadgets at conferences: Happy Giveaways!
To readers driving around this holiday period: Happy Right of Ways!
To readers interested in energetic radiation: Happy Alpha Rays!
To readers interested in protecting endangered fish species: Happy Manta Rays!
To my punctual readers: Happy No Delays!
To my shipwrecked readers: Happy Castaways!
To readers who like to eat Chinese food at home: Happy Takeaways!
To my health-conscious readers: Happy Vitamin K's!
To readers who enjoy a little drama: Happy Passion Plays!
To readers who want to get what they deserve: Happy Merit Pays!
To readers who like it hot: Happy Gamma Rays!
To readers interested in genetics: Happy DNAs!
To readers getting married this holiday season: Happy Fiances!
To my vegetarian readers: Happy Cheese Souffles!
To readers buying a new car this holiday: Happy Chevrolets!
To my secretive readers: Happy CIAs!
To my cordon bleu readers: Happy Fish Fillets!
To readers with new hairstyles: Happy Hairsprays!
To readers who will be helping Santa this year: Happy Electric Sleighs!
To my technology readers: Happy Computer Displays!
To my wig-wearing readers: Happy Toupees!
To my North American readers: Happy USAs!
To my readers in politics: Happy Power Plays!
To my wine connoisseur readers: Happy Cabernets!
To my polyglot readers: Happy Francais!
To my lazy readers: Happy Cliches!
To my still smoking readers: Happy Ashtrays!
To my medical readers: Happy X-rays!
To my ate-too-many-candies-when-you-were-a-kid readers: Happy Tooth Decays!
To readers who like a good musical show: Happy Cabarets!
To my renewable energy user readers: Happy Solar Arrays!
To readers who like to engage with stakeholders: Happy Surveys!
To readers with something to say: Happy Communiques!
To readers interested in the science of proteins: Happy Urokinase!
To readers with kids: Happy Spaghetti Bolognese!
To readers who use public transport: Happy Railways!

And for all the Chief Sustainability Officers who read this blog...Happy Hideaways!

And finally, for anyone who doesn't celebrate anything in the Holiday Season:

The voting is now open at CRRA '13, the only annual global online awards for Sustainability Reports. The voting is open until end January, so you still have some time, but why wait? The holiday season is upon us and you will have lots of time to relax and enjoy reading the shortlisted selection of the best of the best of Sustainability Reports that were published in the last year.

As I usually do, over the next few weeks, I will be publishing more posts about the reports that are in the competition this year, but in this first post, we cut straight to the chase. Which will be The Best Report of 2012? That question will be decided by your votes and announced in Spring 2013. In the meantime, why not take a look at the Best Report category and place your vote? Register to vote or log-in HERE

This category contains 10 reports and 934 pages. Just about right for a relaxing holiday afternoon.

The line up includes:

10reports that are GRI based, of which 5 are at Level A, 4 at Level B, and 1 undeclared.

4reports from the USA, 3 from the UK and 1 each from the Netherlands, Spain and Australia.

Only 3 companies have won the Best Report category since the inception of CRRA - Vodafone Group plc - who hat-tricked in three consecutive years, HP won in CRRA '11 and Coca Cola Enterprises Inc won in CRRA '12 after having been runner-up twice before.

Of the ten contenders, one company, IFF, is competing for the very first time ever in CRRA and is trying its luck in three categories in total (also Best Creativity and Best Materiality).

As you have a little time on your hands during the holiday break, here's a little CSR Reporting Blog challenge: See if you can match these report shots to the 10 contenders listed above.

Wednesday, December 5, 2012

At the risk of repeating myself, I love first reports, and the 2011 Corporate Responsibility Report from Liberty Global is a fabulous example. Liberty Global is an almost $10billion international cable company, headquartered in Denver, U.S., London, UK and Amsterdam, Netherlands, employing 22,000 people with operations in 13 countries. Liberty Global's television, broadband internet and telephony services connect 19.5 million customers who subscribe to over 32 million services provided under brand names such as UPC, Unitymedia, Kabel BW, Telenet, and VTR.

Connect. Discover. Be Free.

Liberty Global has a simple, clear vision: Connect. Discover. Be Free. The company sees its role in society as three-fold: promoting a digital society as a way to improve quality of life, expanding access to the digital world through the services it provides and helping people gain the skills they need to understand, use and enjoy the digital options available today. Liberty Global believes that digital inclusion opens up infinite possibilities for new and better ways of living.

Click on it Grandma!

An interesting contextual perspective is provided by Liberty Global in this first report. We tend to think of access to internet (where access means not only turning on the computer, but also knowing how to navigate and make best use of the virtual world) as something which is under-developed in emerging economies, but even in the European Union, 120 million people are missing out on this digital connection. There are still large sections of the population which are not connected to the internet. Rates of non-use differ in different countries, but I'll cite a few examples: a whopping 54% of Romanians, 28% of Hungarians, 45% of Greeks, 20% of Slovaks, 33% of Poles, 16% of Germans and 14% of Belgians do not use the internet. Through widening access and enhancing skills, Liberty Global makes it possible for non-users to become connected and click on to the benefits of life on the web.
An example is Liberty Global's free computer courses to groups who may lack digital literacy skills. In Hungary, Liberty Global's UPC partners with the Budapest Cultural Center to offer free internet courses for senior people under the banner Click on it Grandma. Over 2,000 seniors
participated in a 25-hour practical e-learning curriculum in 2011, bringing the total to 7,000 since 2006. That’s a lot of clicking grandmas!

Let the Stakeholders speak

The great thing about this first report is that it cuts straight to the chase: it presents Liberty Global's role in society and the most important issues that Liberty Global plans to address through Corporate Responsibility in a clear and effective way. Digital inclusion the Liberty Global way is a clear and unique social business proposition, explained well. In addition, Liberty Global addresses aspects of responsible operations and accountability for impacts, disclosing energy consumption and power saving initiatives, green technologies and green buildings and other workplace and community impacts.
Material issues enjoy a prominent position in the report, informing its content. Here's the matrix.

Liberty Global details three-stage the process that led to the development and prioritization of these material issues. We will be hearing a LOT MORE about materiality with G4, and it's good discipline to get this in place with a very first CR Report.

Linking CR to Business Results

The report conforms to the GRI Framework and although it's positioned at the lower-end transparency Application Level C, it projects an authentic picture of a large organization which is moving forward on the transparency journey, and bold enough to report even though all the details and data are not available at this time. There is even some linkage which shows compatibility between Corporate Responsibility and sustainable profitability. For example, in 2011, UPC Hungary began an energy efficiency program in 18 of its datacenters across the country to reduce energy consumption using new technology in air conditioning units. UPC Hungary estimates this could save over 200 MWh of electricity consumption annually and pay back its investment within two years. Another example tells how Liberty Global turned "risk into opportunity" through a refurbishment program for customer modems and other equipment. In 2011, Liberty Global retrieved and refurbished 3 million set-top boxes and modems, re-purposing 5,000 tonnes of materials that would have otherwise have gone to waste, while making significant financial savings.

Credibility and Trust

The illustrious Leon Kaye has called Liberty Global's first report "The Template for a First Sustainability Report", and I also highlighted this report as exemplary when I presented to the annual Polish Sustainability Reporting Awards event this week in Warsaw. As with any Corporate Responsibility Report, the ultimate objective is to achieve greater trust through delivering a credible report. I like this report for its clear structure, its no-frills simplicity and its genuine representation of the current state of the Liberty Global Corporate Responsibility journey. I believe stakeholders will appreciate this, while demanding greater transparency in future reports. The journey is ongoing, but the direction is on course.

Coming from a legal background, in 2002, Alexandra Palt joined "IMS-Entreprendre pour la Cité", a membership association engaged in Corporate Social Responsibility. Then, from 2006 to 2008, as Director, Promotion of Equality, at the HALDE, she elaborated policies to promote equality in various fields such as education, employment, housing. In 2008, she founded and directed Fabric of Society, a consultancy agency helping companies to take into account the new social and community challenges of society. Although the move to L'Oréal in 2012 is Alexandra's first role in a major corporate, is is not very different from what she had imagined.

"It is very exciting getting involved in all business decisions and in all essential roles. It's fascinating. The most challenging thing for me in this role is the fact that sometimes, stakeholder expectations are very different from the issues which we consider to be the most pressing for us. For us, sustainability is not box-ticking. We conduct stakeholder forums and extensive discussions with NGOs and other stakeholders. Sometimes, what they consider important is already history for us, for example, the importance of one ingredient that we have already taken out of our products. They talk to us about palm oil - there is a lot of emphasis on palm oil today - and for us, this is important too, but we are already sourcing 100% sustainable palm oil and in any event, we are a very small consumer of palm oil.
Animal testing is another, very emotional, issue. We have been working since 1989 to get out of animal testing, we have no finished products tested on animals and 99 percent of ingredients are not tested on animals. Just one percent of ingredients are tested on animals for unavoidable health and safety reasons. What would help us to go even further is to be also challenged on issues like sustainable brands and things that will help transformation, such as inclusive business and helping to change lives."

The report includes a fascinating look at innovative "Predictive Evaluation Methods" which enable replacement of animal testing for 99% of product ingredients. Environmentally, L'Oréal aims to win over 1 billion customers while keeping its environmental footprint in check and reducing emissions, water consumption and waste generation by 50% per product unit between 2005 and 2015. And, of course, as a company for women, women do well at L'Oréal. Women account for 63% of all staff, and 58% of managers. 41% of Management Committee members are women and 21.4% of the Executive Committee. 43% of L'Oréal brands are managed by women.

The 2012 report will be Alexandra's first for L'Oréal, so it seemed appropriate to ask her what she considers to be Smarter Sustainability Reporting, which is at the heart of the forthcoming conference theme. Alexandra said: "To me, it means responding to the preoccupations of stakeholders while insisting on a long term vision of what is really relevant to the business or to the planet. We must proactively envision tomorrow. A report has to have this visionary element - in the right measure. We have made a lot of progress and our report this year is based on a good materiality analysis which is relevant for our business, although it is still work in progress. "

L'Oréal's central theme and role in society is deeply connected to the role of beauty. L'Oréal might even have coined the expression "Responsible Beauty". The company has supported masses of research into the effects of beauty, which has shown that beauty is an essential need of humanity. Research demonstrates there is a positive impact on cancer patients, young girls with eating disorders, or people in difficult social situations and others, who benefit greatly from being able to show their best face to the world. I challenged Alexandra: But, surely, beauty is rather superficial and even judgmental? Is being beautiful a worthy goal of sustainable development? Alexandra asserted: "Taking care of yourself and achieving an inner feeling of beauty helps people to reconstruct themselves. If somebody thinks that beauty is superficial, then they haven't thought a lot about it. We feel good if we consider ourselves to be as beautiful as we can be. This is the reality."

Alexandra also talked about the culture at L'Oréal, saying: "It's about individuals and the talent they have. At L'Oréal, we are provided with a job in which you can express your talent. We are passionate about human beings and allow people to express and integrate issues such as work-life balance and more. L'Oréal never lets people down - if you are not good at one thing, we find you another - every person has talent and the idea is to connect that talent to the needs of the business."

At the Smarter Sustainability Reporting Conference, Alexandra will talk about Relevance and Materiality, topics which in themselves are both relevant and material! I am looking forward to hearing more of what Alexandra has to say and hope you will be joining me! (Don't forget to write to me if you would like a discount on registration).

Thursday, November 29, 2012

Earlier this month I was honored to give the keynote speech at the Austrian Sustainability Reporting Awards (ASRA). I spoke about the importance of reporting, the challenges of reporting and the dynamic world of reporting and current trends. I likened publishing a Sustainability Report to winning the World Cup.

Here's a section from my speech:

"We often think of reporting as such a tough process, fraught with so many complex issues – organizational issues, emotional issues, collaborative issues, time pressures, different opinions, checking, taking out, adding back in, debating, encouraging, proofing, begging, crying, laughing…. publishing your report is like winning the World Cup. In other words, it's an almost impossible task.

Photo:Worldcupbuzz.com

It's a long process which represents much more than the written, or online, report you have as a result, or the cup which the team holds when they win. It's an individual effort but it's also a team effort. It requires lots of preparation, and you never quite know that you are ready until you get out there on the field and start to run. Once your report is published, once the referee announces the winning team, you breathe a big sigh of relief and look forward to getting some sleep. Deep down, you know, however, that the end of one report is the beginning of the next. Winning one World Cup is the trigger for winning the next.

With reporting, though, we always seem to dwell on the difficult aspects. We rarely think about reporting in positive terms. Working towards winning the World Cup has many benefits along the way. Everyone – the team and the individuals in it enhance their performance, learn new things, and achieve higher levels of dialogue, teamwork and effectiveness. Even if they don't win the World Cup, each team has gained through participation in the process. One of my favorite experiences when I am writing sustainability reports for clients is when, during the reporting process, people say to me: "We didn’t know that about our company!". Sustainability reporting is a journey of discovery and empowerment, not just a dreaded task that we must complete.
With the World Cup, no-one ever asks – Why are we doing this? No-one says: Why on earth should we compete?

And yet, with sustainability reporting, there is always someone who asks the inevitable question:

Who reads Sustainability Reports?

My answer, which you know by now, is: reports aren't meant to be read, they are meant to be used.

They achieve at least 50% of their value before they are ever published, because of the internal engagement that is required to develop the content for such a report. You cannot deliver a sustainability report without having conversations, or without asking questions. These interchanges are what make your reporting valuable. The more you dialogue, the better your sustainability performance and internal accountability will become, and the more compelling your report will be. Despite the fact that everyone bemoans the fact that no-one reads reports, more and more companies are reporting.

In Austria, there are around 100 companies which have produced Sustainability Reports over the years, but less than 15 which have been reporting consistently every year for the past three years. As Austria is one of the richest countries in the world, this means that a lot of wealth is being created through business, and Austrian stakeholders should have an interest in how it's being created and where it's all going. This is a good time to ask those questions, with probably EU legislation on the horizon, as well as several other fascinating developments in the world of reporting.

All of this is why the hard work of the Chamber of Public Accountants in Vienna, in collaboration with several other organizations, including respACT, the Austrian Business Council for Sustainable Development, an organization doing fabulous work to promote CSR in Austria, is so important. Through the annual ASRA awards, greater awareness for transparency in business and voluntary reporting is advanced. ASRA is an important tool in driving this market forward. Kudos to the winners, who were:

Large Enterprises:Palfinger: GRI-checked A+ Report, 105 pages. Palfinger is a large group, with 47 companies in 23 countries and 5,600 employees. They make industrial cranes and forklifts (lifting, loading and handling solutions). This report is their fifth. Four-year comparative data is presented and Palfinger has more than halved CO2 emissions per ton of product in the past two years.

Verbund : GRI A+ Report, 96 pages. Verbund is Austria’s leading utility and one of the largest producers of hydroelectricity in Europe, operating 123 hydropower plants in Austria and Germany and employing over 3,000 people. Verbund generates around 40% of Austria's total electricity output. Verbund has been producing reports since 1997. This is an interesting report with much local color and context.

OeKB : GRI A+ Report, 85 pages. Oesterreichische Kontrollbank Aktiengesellschaft is Austria's main provider of financial and information services to the export industry and the capital market, employing 400 people. This report contains a specific response by OeKB to the first 27 Articles of the Universal Declaration of Human Rights.SME'sAustria Glass Recycling (AGR) : GRI A+ Report, 55 pages. AGR has 9 employees and organizes the collecting and recycling of used glass packaging throughout Austria. AGR is a non-profit company. In 2010, AGR collected 227,000 tons of glass waste of which 85% was routed for recycling. This is an informative report with much information about the state of glass recycling in Austria.

Voeslauer
: GRI B+ Report, 40 pages. Founded in 1935 with 170 employees, Voeslauer has sales of around EUR88 million and produces natural mineral water. This is the first time the Voeslauer report follows the GRI guidelines.

Kaerntnermilch : GRI A Report, 50 pages. Kaertner, founded in 1928, employs 169 people, supplying milk and white and yellow cheeses, working with over 1,600 supply farmers in the Austrian region. This is the company's second report.

Integrated ReportsVBV Vorsorgekasse AG :
GRI-checked A+ Report, 76 pages. This is the sixth integrated report from the Vorseogekasse, founded in 2002, which employs 32 employees, administering provident funds. The report contains a detailed stakeholder dialogue reported in the form of an interview with a stakeholder panel.

oekostrom AG
: GRI A Report, 63 pages. oekostrom has 28 employees and is involved in the supply of energy production and trade as an Austrian investment company owned by approximately 2,000 shareholders. The company was founded in 1999 with the aim of building a sustainable energy future, to supply customers across Austria with "green" energy and the expansion of renewable energy sources in Austria. The report contains some great shots of oekostrom employees who are obviously having fun being green!

EVN AG :
GRI A+ Report, 185 pages. EVN has 8,250 employees, of which 2,500 are in Austria. EVN is an energy and environmental services company, offering electricity, gas, heat, water, waste incineration and related services to more than one million customers in Austria and with additional operations in Bulgaria, Macedonia, Albania, Germany and Croatia, serving more than 3.7 million customers in total. The report is entirely online with chapter downloads.

(In addition to these nine corporate reports, the Vienna University of Agricultural Sciences won the public agency reporting category with an impressive report which you can see here. At GRI level A+ and 164 pages, this is a highly detailed report which even contains sections for kids!)

Interestingly, all winning reports are GRI based, all but one at Application Level A. As with many markets, the line-up includes a predominance of energy companies (30%) and financial services (20%), with other sectors in ecological services, food and beverage and industrial equipment.

These are the companies that are leading the way in the Austrian reporting scene. I hope the fabulous attendance at the ASRA awards ceremony is indicative of an intention by more Austrian companies to take the plunge and report in 2013.

I would like to thank respACT, the Austrian Business Council for Sustainable Development for inviting me to speak at ASRA (and also run a workshop about the implications of G4 reporting for members of the Austrian network on the previous day). It was a pleasure for me to take part in such positive events, meet some fabulous people and, as always, learn something new.

Sunday, November 25, 2012

Some conferences sound just too good to pass up. This one, the Sustainability Leaders Forum 2012 is one of those. Taking place on 5th December in London at the CBI Conference Centre, the one-day agenda is crammed with what promises to be a host of interesting and innovative insights and aproaches to old and new challenges, from which I hope to learn and have the opportunity to discuss. "The Sustainability Leaders Forum has been developed as a platform for forward-thinking professionals who want to collaborate, challenge the status quo and drive progressive change across their organisation and supply chain."
Sounds good to me!

Among others, the following six companies, which have been widely recognized for their sustainability achievments, offer the possibility for us to:

Find out how M&S is thinking differently about the business 5 years after the launch of Plan A.
Speaker: Mike Barry, Head of Sustainable Business, M&S

Learn how Asda is driving sustainability across suppliers’ businesses projected to save over £100m a year. Speaker: Julian Walker-Palin, Head of Corporate Sustainability, Asda

Find out what engagement and behaviour change approaches Vodafone used to break down cultural barriers to drive sustainable development in an emerging market.
Speaker: Luisa Gentile, Sustainability Leader, Vodafone

Friday, November 23, 2012

I popped over to London this week on my way back from another engagement to catch the second day of the action-packed Ethical Corporation Annual Reporting Summit. I arrived just in time to catch Anne-Marie Flannagan, Director of Corporate Social Responsibility at Fazer, hand out a whole pile of her company's products and pass them around the room. That was quite fortuitous. You might be wondering, as I was, who on earth is Fazer? Well, it's a chocolate company, founded in 1891 and privately owned to this day. After you tasted their products (and I did, all of them), you don't forget the name. Fazer is pronounced Fat-Sir, by the way, which is probably fairly appropriate :) Anne-Marie shared with us the processes of stakeholder engagement this company has undertaken to get into line with expectations from NGOs and consumers to address fair cocoa sourcing and traceability, which, as Hershey found to their discomfort, never goes away.

Then, a little later, the showstopper of this Reporting Summit was underway. Three reports, with three company representatives presenting their report highlights. Two judges who brought their own soapboxes, evaluating which, if any, of these reports have The X Factor. And Toby Webb, the smart guy that leads Ethical Corporation, was moderating and casting the deciding vote.

We knew this would be an interesting session when Ellen Jackowski, Head of Reporting at HP described the HP 2011 Global Citizenship Report (which is 186 printed pages and even more on the web) as "a kind of a beast". Being the largest technology company in the world demands a certain level of transparency and HP aimed to make that level maxmum. The report includes data dashboards which tell number-hungry stakeholders about the performance and trends in all areas of HP sustainability. Ellen noted that the next report will be just a touch "more concise."

Ruth Woodall gave a sharp presentation about the Cooperative Group's 2011 Sustainability Report, which is their fifteenth, not forgetting to mention that in a poll by Ispsos Mori, 60% of people had read the Cooperative Report (I guess they must have polled the Management's immediate family members), which she concluded to mean that people are finding the information the Coop presents to be useful. She said that reporting both drives performance and becomes the bedrock of all other sustainability communications.

Dr. Márcia Balisciano, Director of Corporate Responsibility at Reed Elsevier started out with a song... yes, she actually did sing... I think she took the X Factor title of this session a little too literally. Simon Cowell would have probably turned whiter than he did when Susan Boyle first rendered "I Dreamed a Dream", listening to Marcia put sustainability reporting into song, but heck, maybe this is a new direction for The X Factor. They could call it the Reporting ZZZZZZZZZZZZZ Factor. Anyway, Márcia presented the shortest report of the three at 57 pages, advising that Reed Elsevier's 2011 Corporate Responsibility Report tries to focus on their "unique contributions" in the area of access to information, promoting the rule of law and more. She admitted that one of the biggest challenges is how to tell the bad news as well as the good news.

So, presentations made, the judges had a field day, using this opportunity to regurgitate anything negative that has ever been said about sustainability reporting.

Mallen Baker, a long-time respected voice in the sustainability and CSR communications arena, said he didn't enjoy reading any of these three reports and that "generically all three reports live within the paradigm of the current state-of-the-art, which is not satisfactory". He didn't quite explain what is not satisfactory about that, but he did go on to say that all the reports show a body of good work and that it's a sign of leadership that the three companies are on the Reporting X Factor stage at all, prepared to put themselves in the hot seat. And it got hotter.

Mallen criticized one report for presenting meaningless statistics and inadequate, unchallenging non-credible targets, noting that he had "lost the will to live by the time he had reached page 100." He said that the question in his mind was at which point you admit to being less than perfect. Mallen has the view that you only make progress by failing. He spoke about one of the longer reports using dense, corporate speak, without which the report could have been about two thirds shorter in length. About the Coop, Mallen said he expected more, because "they have done more for ethical business than any other retailer", but he also mentioned that there was too much verbiage. He also looked for the warts, something which I blogged about a while back, and he did find a few small ones. Mallen was not impressed with the target setting and lack of narrative explaining poor data in one of the reports, but he did find one report with clarity of communication and the clearest structure.

Mike Tyrell, a former Sustainable Investment analyst and founder of SRI-CONNECT, a web based tool for SRI engagement, announced that his role is to "connect your talent to the money", making no bones about the fact that he views reports from an investor standpoint. His expectation: "I want the investor to come and get me - I want detail about contacts, the timetable for reporting, an investor summary, an SRI page, and clear presentation of numbers." He took the opportunity to replace Triple bottom Line thinking with a Quadruple Bottom Line (even though that doesn't roll off the tongue quite as easily). This is Environmental, Social, Economic and Financial, where economic is the contribution the company makes to the health of the economy and Financial is the return of financial value to shareholders. Paradoxically, of course, sustainability reporting has traditionally left out the financial element, as this is the job of the Annual Report, so it's not clear if Mike is advocating for Integrated Reporting or he forgot that he was in a Sustainability Reporting X Factor debate. He also called himself a data-hater - he doesn't want all the data, he wants materially relevant data which connects sustainability performance to financial impacts.

Mike said that one of the reports was a tease, because it referenced revenue opportunities arising from sustainability practices but did not provide enough information. Mike was most disappointed, personally insulted even, when one report states at the outset that is is not targeted at investors but at other stakeholders. Nonetheless, he valiantly continued to read on and found that and ultimately the report gives good coverage of diverse activities in a credible way and engenders trust. On reading another report, Mike confessed to being in "agony" because the report omits to address sustainability issues which is are at the heart of the business model.

The panel, including Toby Webb, selected The Cooperative Group's report as the best of the three, and this was confirmed by the audience popular vote, which was a show of hands. There was no time for texting.

A perspective of my own:

I always maintain that reports are not meant to be read, they are meant to be used. So, sitting down to read over 300 pages of Sustainabilty Reports in one session is an excercise which would turn anybody's mind into jello. This is clearly what happened with the judges, who made their pronouncements, in part, on the basis of sensationalism rather than balanced opinion.

Too long, said the judges. The fact that, by their very nature, Sustainability Reports are designed to reach a wide and diverse audience, and are not intended to be a replica of an Annual Report, means that much of the criticisms leveled at the three reporters were, in my view, a little uncalled-for. A 186-page report is not meant to be read end-to-end, and suggesting that all the most material information could be crammed into 60 pages may leave certain stakeholder groups unable to find what they need. I am not advocating for long reports, but I don't believe reports should be judged on length. What they should have is a clear structure where information can be easily navigated and the most important information well highlighted.

Too many case studies, said the judges. Often, case studies are what make reports come alive and these tend to be the most sought-out parts of reports. Clearly, the case studies must be connected to performance and offer substance, but reports without case studies is like trifle without sherry.

Wishy-washy targets, said the judges, referring to targets which define process rather than outcomes. I have some sympathy for this, but too often in reporting, we see companies declare targets which are just long-range numbers which are very challenging versus current performance. Process-based targets, which show what a company is intending to do to achieve these targets, are useful milestones and support credibility.

Not enough bad news, said the judges. This is an unrealistic expectation. No company goes the Full Monty. Ever. Just get that. Sustainability Reports will never be a list of failures. It is reasonable to expect companies to present challenges and issues they are attempting to address, as well as explain actual dips in performance, but if we are expecting Sustainability Reports to read like John Steinbeck's "The Grapes of Wrath", described as one of the 10 most depressing novels ever, then maybe that is what we should read. Sustainability Reports must be optimistic, sustainability at its root is an optimistic exercise, otherwise none of us would do it. Reporting must be authentic, it must present a balanced picture, but looking for the Bad News is always going to be a fruitless endeavor.

What I didn't hear consistently from the judges, is whether these reports ultimately created greater trust. Trust is what reporting is about. Whatever stakeholder group you belong to, and whatever specific information you seek, when you use a Sustainabilty Report, you want to come away feeling that you trust that company just a little more. Mike Tyrell made this point about the Cooperative Report. He felt that report did promote trust. Perhaps, at the end of the day, that's what swung the overall vote in their favor.

The Reporting X Factor was one of the best Reporting Conference sessions I have attended in a while, and both the judges and the reporters engaged in an entertaining and thought-provoking way. The perspectives were interesting and all companies, I am sure, received valuable feedback, while the judges got an opportunity to go public with everything they think is wrong about Sustainability Reporting using three willing sitting ducks. It was a fun-serious session and I am already looking forward to the next one. Maybe then, Ethical Corporation can invite Simon Cowell, who, in his inimitable way, will say something like: